Iguiñiz, Javier (2009). "Children's development, a way for human development in Peru " Paper presented at the 6th annual conference of the HDCA, 10-12 September 2009, Lima, Peru.
Substantive freedoms are the result of the interaction of, among others, economic, political and social instrumental freedoms. Two types of questions emerge. The first one relates to how free are agents in each sphere from those in the rest, and how helpful and limiting are such interactions. The second ones relate to how free are agents operating in the economy, and particularly inside the rules of the markets. This paper deals with the second type. How free can the economic agents be to participate in the market? But freedom in the economy has both instrumental and substantive freedom aspects. It is having both in mind that the problem of the distribution of substantive freedoms has to be addressed to face the challenge of markets. In this paper we are going to carry out a partial approximation to the analysis of such challenge, focusing our attention in one aspect of the workings of the market: competition among firms. We analyze three aspects of market competition. Although in each one of them one can appreciate different aspects of the freedom to compete, they also contribute specially to some of them. We propose that the “neoclassical general equilibrium” framework mainly contributes to the discussion of the outcomes of an economic activity, the “barriers to entry” approach calls for a study of the resources necessary to compete, and the “competition as a process” approach emphasizes the competitive activity itself. As we move from the first onwards, enriching the meaning of competition, the possibility of gaining and losing opportunities to participate in the market, and of doing it adequately becomes more evident. Entry and exit are after all part of the competitive process, but also are improvements and deterioration of capabilities. Each concept of competition responds to theories that specify or allude to certain types and distribution of freedoms of manoeuvre of economic agents in the competitive arena. Finally, we use the above distinctions to suggest some more causal connections between economic competition and development as expansion of freedom.